If this is your first visit, be sure to
check out the FAQ by clicking the
link above. You may have to register
before you can post: click the register link above to proceed. To start viewing messages,
select the forum that you want to visit from the selection below.

News trading

News trading is NOT forbidden at RoboForex!

When planning their trading operations during important news and significant statistics periods, traders have to take into account several nuances, which are related to the ways the prices are moving at that time and peculiarities of execution of different order types.

In case of higher volatility and lower liquidity, which are typical for important news and significant statistics periods, instrument prices are unstable as they change much faster than usual and may have large gaps. As a result, spreads are widening and this fact influences the order execution process.

One should always remember that long positions (buy orders) are opened at the Ask price and closed at the Bid price.
Consequently, short positions (sell orders) are opened at the Bid price and closed at the Ask price.

All buy orders will be executed at the Ask price, as well as pending buy orders will be activated when the price reaches the level specified in the order. Financial results of open long positions (Buy) will be calculated at the Bid price.

All sell orders will be executed at the Bid price, as well as pending sell orders will be activated when the price reaches the level specified in the order. Financial results of open short positions (Sell) will be calculated at the Ask price.

When spreads are widening, the total result of oppositely directed positions opened in the same instrument may significantly reduce the account Equity, because the result of short positons will go down due to the Ask price rise and the result of long positions will go down due to the Bid price decline at the same time. As a result, the account margin level may fall below the Stop Out level and all positions on the account will be closed compulsorily.

RoboForex offers traders two types of market order execution:

Market Execution is applied to Pro-Cent, Pro-Standard and ECN accounts.

Instant Execution is applied to Fix-Cent and Fix-Standard accounts.

In the Market Execution mode, traders’ orders are executed at the current market price, which exists on the market at the moment. In other words, in this case the order execution price is not guaranteed by anything and, when important news and significant statistics are published, will be different from the price that existed at the moment the order was sent for processing. This difference is called "slippage".

In the Instant Execution mode, the price specified in the order is compared to the current price that exists on the market at the moment the order is processed. If the current price is different from the one in the order not more than the value specified in the settings, the order will be executed. Otherwise, the order will be declined with "Off Quotes" comment and the client will be offered to send the order at the new price (Requote). The client has three seconds to agree to the new price or cancel the order. The client’s agreeing to the new price doesn’t guarantee that the order will be executed at this price, it just resends the order. As a result, this type of order execution guarantees the price of order execution, but not the order execution itself.

Pending orders can be of two types, Stop and Limit.

Stop orders implement the algorithm that sends the market order when the instrument price reaches the level specified in the order. This algorithm guarantees the order execution, but not the price, and the execution price will be different from the price specified in the order when important news and significant statistics are published. In other words, during news periods orders of this type will be executed with "slippages". Stop orders include Stop Loss, Buy Stop, and Sell Stop. When trading using these orders, one should always remember the above-mentioned risks.

Limit orders are executed at the required or the better price (with positive "slippage"). In some cases, orders of this type can’t be executed even if the instrument price reaches the specified level or will be executed partially. Limit orders include Take Profit, Buy Limit, and Sell Limit.

So, when planning news trading, always take into account the higher volatility and the lower liquidity, which may result in: